The Dollar tumbles over 1% after weak data – Binary Options Daily Review

Markets Report

Wednesday 3rd June 2015

Prepared by MarketsWorld Binary Options Analyst

Global Markets

Market Index Closing Level Move on day Intraday Market Range
CAC 5,004.46 – 20.84 4,960.72 – 5,051.68
DAX 11,328.80 – 107.25 11,270.57 – 11,467.07
Dow Jones 18,011.94 – 28.43 17,925.33 – 18,091.87
FTSE 6,928.27 – 25.31 6,872.12 – 6,972.25
IBEX 11,271.40 + 33.30 11,151.30 – 11,369.10


Closing Markets Summary

Dow Jones

Stocks in the US closed slightly lower on Tuesday as early gains evaporated after investors received mixed signals from Greece, false reports circulated that creditors had agreed on proposals. Dutch Finance Minister Jeroen Dijsselbloem however dismissed the claims, adding that a deal over the country’s bailout was “not theoretically possible this week”. Economic data showed that US factory orders declined for the eighth time in nine months in April, orders for goods produced in US factories fell 0.4% month-on-month in April, a sharper drop than the 0.1% that had been forecast. In company news, discount retailer Dollar General moved higher as first quarter profit beat expectations, although sales fell short. Clothing retailer Guess shares were making gains despite analyst expectations that company will post a quarterly loss of 5 cents per share compared with 3 cents share a year ago, after hours the shares jumped 6% in extended trade after the retailer swung to profits. At close, the Dow Jones was down 28.43 points at 18,011.94, the S&P 500 closed down 2.13 points at 2,109.60 and the Nasdaq closed down 6.40 at 5,076.52.

Europe European markets ended Tuesday’s session on a mixed note as the Dutch finance minister dismissed reports Greece had reached a deal with its creditors. Jeroen Dijsselbloem shot down suggestions an agreement had been reached on the proposal creditors will submit to Greece’s authorities to unlock further aid for Athens, saying a deal was “not theoretically possible this week”. Athens needs to agree a series of reforms with its creditors if it is to unlock the €7.2 billion in bailout money it requires to meet Friday’s deadline for a €300m payment to the IMF. In economic data, figures released by Eurostat showed that inflation in the Eurozone rose to 0.3% on the year in May, beating the forecasts for 0.2%. The rise in consumer prices follows a flat reading in April and marks the first increase in six months, which should be well-received by the European Central Bank as it looks to avert a slide into deflation. German unemployment fell by a seasonally-adjusted 6,000 to 2.79m in May, while the jobless rate remained at 6.4%, as forecast. On the company front, Saint-Gobain was in focus after the company said it was reinforcing its presence in Vietnam by increasing its shareholding in Vinh Tuong Industrial Corp. Shares in Novartis reversed earlier gains after data showed that its secukinumab drug improves the signs and symptoms of AS disease activity through one year of treatment, confirming previous findings. Elekta AB slumped after reporting annual earnings that missed forecasts and warning that sales will continue to decline in the first half of the next year. LVMH Moet Hennessy Louis Vuitton SE gained after HSBC Holdings recommended buying the shares, citing expected growth in the luxury goods sector. On regional markets the CAC closed down 20.84 points at 5,004.46, the DAX closed down 107.25 points at 11,328.80 and the IBEX closed up 33.30 points at 11,271.40.

The FTSE closed slightly lower on Tuesday, as mixed messages from Greece weighed on investor sentiment. Reports emerged that Greece’s creditors had agreed on proposals circulated early in the afternoon, although Dutch Finance Minister Jeroen Dijsselbloem later dismissed the rumours, adding that a deal over the country’s bailout was “not theoretically possible this week”. Economic data from the Bank of England revealed that British mortgage approvals grew at their fastest pace in six years in April, totalling 68,076, ahead of forecasts of a 63,000 reading. On the company front British American Tobacco topped the fallers list after a class-action lawsuit in Canada found that the company and two other cigarette makers should pay a combined CAD$15.6 billion to smokers in “moral and punitive damages”, the largest legal award in Canadian history. Sector-peer Imperial Tobacco Group also dropped on the news. British Land was lower after it unveiled plans to launch a £350m senior, unsecured convertible bonds offering by 2020. The company plans to use the net proceeds to fund the £210m acquisition of One Sheldon Square, Paddington Central in April 2015, the £135m acquisition of Surrey Quays Leisure Park, Canada Water in March 2015 and to fund committed development spending. Tesco fell after seeing its share of the grocery market decline to 28.6% over the 12 weeks to 24 May, according to Kantar Worldpanel. Sainsbury was also lower, as sales fell 0.3% over the monitoring period, while Morrison gained on a sales increase of 0.1%. Wolseley moved higher after registering a sharp rise in quarterly profits, thanks to favourable tailwinds form the currency market. The heating and plumbing products distributor, which has a large exposure to the US market, reported a 16.6% increase in revenues for the third quarter of its fiscal year to reach £3,301m. At close the FTSE was down 25.31 points at 6,928.27.


Economic News Expected Today


Type Period Forecast Previous Importance
ADP Non Farm Employment Change May 200K 169K High
Trade Balance April -$44.2 billion -$51.37 billion High
ISM Non Manufacturing May 57.2 57.8 High
ISM Non Manufacturing Employment Index May 56.7 Medium
Crude Oil Inventories May -2802K Medium
Beige Book June Medium
FOMC Member Charles Evans Speaks June Medium


Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
Services PMI (Spain) May 59.5 60.3 Medium
Composite PMI (Spain) May 59.1 Medium
Services PMI (Italy) May 52.7 53.1 Medium
Composite PMI (Italy) May 53.9 Medium
Services PMI (France) May 51.6 51.6 Medium
Composite PMI (France) May 53.9 Medium
Services PMI (Germany) May 52.9 52.9 Medium
Composite PMI (Germany) May 52.8 52.8 Medium
Services PMI (Eurozone) May 53.3 53.3 Medium
Composite PMI (Eurozone) May 53.4 53.4 Medium
Retail Sales (Eurozone) April 0.6% m/m; 2.0% y/y -0.8% m/m; 1.6% y/y Medium
Unemployment Rate (Eurozone) April 11.2% 11.3% Medium
ECB Interest Rate Decision June 0.05% 0.05% High
Marginal Lending Facility (Eurozone) June 0.30% 0.30% Medium
ECB Press Conference June High


Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
Services PMI May 59.2 59.5 High
Composite PMI May 58.4 Medium


Other Global Economic Data Expected

Type Period Forecast Previous Importance
GDP (Australia) Q1 0.6% q/q; 2.0% y/y 0.5% q/q; 2.5% y/y High
HSBC Services PMI (China) May 53.3 52.9 Medium
HSBC Composite PMI (China) May 51.3 Medium
Trade Balance (Canada) April -CAD$2.0 billion -CAD$3.02 billion Medium


Economic News Round Up MarketsWorld Bars
US factory orders fell unexpectedly in April, the US Census Bureau reported that factory orders declined by a seasonally adjusted 0.4% in April, below forecasts for a gain of 0.2%. Factory orders rose by 2.2% in March, whose figure was revised up from a previously reported gain of 2.1%. Consumer price inflation in the euro zone rose more than expected in May, providing support that the European Central Bank’s massive stimulus program was beginning to take effect. Eurostat reported that consumer price inflation rose by a seasonally adjusted 0.3% last month, above forecasts for a gain of 0.2%. Core CPI increased by a seasonally adjusted 0.9% in May, compared to forecasts for a 0.7% reading. The number of unemployed people in Germany declined for the eighth consecutive month in May, while the country’s jobless rate held steady at a record low, Germany’s Federal Statistics Office reported that the number of unemployed people fell by a seasonally adjusted 6,000 last month, compared to forecasts for a drop of 10,000. Jobless claims decreased by 9,000 in April, whose figure was revised from a previously reported fall of 8,000. Germany’s unemployment rate held steady at 6.4% in May, in line with expectations and unchanged from April.

The number of unemployed people in Spain fell more than expected in May, Spain’s Employment Ministry reported that the number of unemployed people declined by a seasonally adjusted 118,000 last month, compared to forecasts for a drop of 115,500.

UK construction sector activity expanded at a faster rate than expected in May, Markit and the Chartered Institute of Purchasing & Supply reported that their UK construction PMI rose to a seasonally adjusted 55.9 last month from a reading of 54.2 in April. Forecasts were for the index to improve to 55.0 in May.
The amount of domestic currency in circulation and deposited in banks in the UK rose in the last quarter, the Bank of England reported that UK M4 Money Supply rose to a seasonally adjusted 0.4%, from 0.3% in the previous quarter. The UK M4 Money Supply was forecast to rise to 0.4% in the last quarter.



Forex Round Up MarketsWorld Bars
The Dollar fell over 1% against a basket of other major currencies on Tuesday, after data showed that US factory orders fell for the sixth straight month in April sparking concerns over the strength of the US economy. The Commerce Department reported that factory orders fell 0.4% in April, below forecasts for a 0.2% increase. March’s figure was revised to 2.2% from a previously reported 2.1%. On a year-over-year basis, factory orders dropped 6.4%, the sixth straight monthly decline. The weak data sparked fresh fears over the outlook for second quarter growth after data last month showed that the US economy contracted 0.2% in the first quarter. EUR/USD jumped 1.94% to $1.1138, helped by data showing that Eurozone consumer prices rose by 0.3% from a year earlier in May. Underlying inflation, which excludes prices for energy, food and alcohol, also picked up. Annual core inflation rose 0.9% from a record low of 0.6% in April. The Euro’s gains was however held in check after Greek Prime Minister Alexis Tsipras said Tuesday that his government submitted a “comprehensive proposal” to its lenders late Monday and added that a decision on an agreement now rested on European political leaders. The yen showed little reaction after Bank of Japan Governor Haruhiko Kuroda said Tuesday that it was important for currencies to reflect economic fundamentals.The USD/JPY declined 0.55% to ¥124.11. Sterling gained ground after market research firm Markit and the Chartered Institute of Purchasing & Supply said that their UK construction PMI rose to 55.9 last month, the GBP/USD gained 0.82% to $1.5326.The USD/CHF tumbled 1.30% to Fr0.9337. The Australian and New Zealand dollars were stronger with the AUD/USD up 1.89% to $0.7749 and the NZD/USD up 1.07% to trade at $0.7163. The USD/CAD dropped 0.56% to CAD$1.2452. The US Dollar Index was down 1.42% at 96.14.


Commodities News
Commodity Round Up MarketsWorld Bars
Gold prices ended firmer on Tuesday on a short-covering and bargain-hunting after recent selling pressure, the price was also supported by a sharply lower US dollar index. August gold was up $5.10 at $1,193.80 per ounce. July silver was up $0.10 at $16.78 per ounce.Crude-oil futures settled higher on Tuesday as upbeat comments by Saudi Arabia’s oil minister helped lift the US benchmark to its highest settlement of the year, ahead of a key meeting of OPEC later this week. Weakness in the US dollar and expectations that weekly data will show a decline in US crude supplies also provided support for oil. July crude rose $1.06 to settle at $61.26 per barrel. July brent crude added $0.61 to $65.49 per barrel.


The MarketsWorld Overview MarketsWorld Bars
Service sector activity in the US edged up to 57.8 in April from 56.5 in March, the increase was above the 56.2 level that was forecast. The reading raised optimism that the US economy has rebounded from the soft patch seen in the first quarter. The New Orders Index rose by 1.4 points from March to 59.2. The Employment Index edged up 0.1 points to 56.7 from the March reading. The Prices Index declined 2.3 points from 52.4 reaching 50.1, indicating prices increased in April for the second consecutive month, but only mildly. US Service sector activity is expected dip slightly in this latest reading to 57.2 this time.
For Binary Options Trading, monitor the Dollar.




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